Market Update, Thursday June 30, 2011

The markets are moving higher and the question many are asking is if this move is for real and a new uptrend has begun. The chart below shows E-mini S&P 500 futures showing resistance at around 1321, if E-mini can move above this channel, I will be convinced that a new up-trend is in the make.

Market Update for Saturday, June 25, 2011

The markets are on a downtrend and no confirmation of a turn-around has been made yet. The Vix however, moved higher on Friday and the Put/Call ratio closed above 2, signaling that a bottom is near.

It looks to me that the market may find support again at around its 200 SMA (green line below) and it could make a double-bottom like it did at the beginning of December 2010 (shaded circle on the graph below).

As for my trades, I sold my UPRO holdings at 74.65, a 3% loss, a net loss of 0.1% so far. I am planning on entering UPRO again when the market gives a bull signal.
A key level to watch is the low made on March 16 at around 1249.

Part 2: Market Update for Saturday, June 18, 2011

Looking again at the chart of S&P 500, it seems another scenario could also develop. Since we haven't seen oversold on the daily chart, I feel we should also consider the level at which this could occur. I am not sure if a broadening top is developing in which we could go as low as 1233 which corresponds to the 38.2% fib retrace from 1011 to 1371.

After reaching this level, the S&P 500 would rally to around 1400 to complete the 5th wave.
We'll soon find out which scenario develops.

Market Update for Saturday, June 18, 2011

The S&P 500 bounced off its 200 Day Moving Average (green line) this week which was at around the 1258 level. Meanwhile the longer term upward trend line (red line) from the March 2009 low is also close to the 1258 level as well.

Most indicators appear to be oversold and the S&P 500 could bounce from here. MACD is trying to turn on the 4h chart; however, it hasn't turned on the daily chart. I'd wait for a turn on MACD daily to add to a long position here. My recommendation is to stay cash until then. Another thing to watch is the Dollar Index, its MACD on the daily chart is still positive; similarly, wait for a turn on it for confirmation.